With the Masters in our rearview mirror, warmer weather, greener grass, and the smell of spring in the air, the golf equipment and apparel selling seasons usually roar into high gear in April. New club sales spike as golf courses open, pro shops fill with the latest and greatest inventory, and golf brands execute their manufacturing and sourcing strategies while looking toward next year’s product launches.
However, 2025 is anything but a normal year. Every day starts anxiously with CEOs checking their messages before sunup to see what happened overnight. What were the social media posts or comments from the Trump administration, and how will those affect the business going forward?
The heavy financial burden of ever-changing tariffs without any logical or rational espoused strategy from Washington leaves the leaders of the major golf companies perplexed and anxious. Without a solid understanding of the economic underpinnings of the U.S. government’s plans for taxing imported products, it’s impossible to plan for the next month, let alone for the rest of the year. The capricious changes implemented via social media posts or random comments from the administration’s leaders are roiling capital markets and creating an uncertain macroeconomic climate, which could potentially change the U.S. economy for years to come.
GGPBiz spent the past few days speaking with industry leaders in golf equipment, apparel, and retail to gain insights into how they feel and what they expect might impact the golf economy in the U.S. and worldwide.
Here’s a summary of the broad themes and feelings:
Hard data on economy remains mixed
“Hard” objective U.S. macroeconomic data looks at actual results, is backward-looking, and still had some positive readings through the end of March, with 4.2 percent unemployment, retail sales in total that increased in line with expectations for March (+1.4 percent), and corporate earnings for Q1 ’25 that thus far have come in at or above estimates. At the same time, inflation and interest rates remain elevated and will constrain growth.
Soft data suggests rough seas ahead
“Soft” data, which reflects the opinions of consumers and various invested groups like purchasing managers, CFOs and CEOs, is rapidly deteriorating.
The preliminary results from the University of Michigan Consumer Sentiment Index for April 2025 showed a sharp drop from March (-11 percent) and was down 30 percent since December 2024. The Conference Board has yet to release its April data, but their results through March were consistent with the University of Michigan’s, pointing toward significantly lower consumer expectations for the economy in the months ahead.
Generally speaking, the U.S. consumer and many in the C-suites are extremely nervous about the current state of the economy.
Golf retail sales through Q1 above expectations
Conversations with industry insiders suggest that, in total, first quarter 2025 golf equipment sales were up vs. the same period in 2024. However, there are a couple of caveats to be aware of:
— Many thought leaders believe purchases of golf products were being “pulled forward” in anticipation of the tariffs’ impact on pricing. Thus, a golfer considering purchases later this spring may have bought earlier to avoid a potential increase in the price of a new driver or set of irons. Buying sooner rather than later is great for short-term sell-through but can create product shortages and inventory out-of-stock situations while also producing a hole in demand for later in the year, particularly if the economy slows and/or prices go up.
— “Liberation Day,” when the president announced his massive tariff plan in more detail, was on April 2, 2025, only a little more than three weeks ago. It’s important to note that date because it is after the Q1 data was complete. While the threat of tariffs was already in the market in March, the reality or the size of the tariffs had yet to be determined.
Where will we go from here?
C-suite executives want as much certainty and assurance as possible about consumers’ economic and spending expectations, as well as their own raw material and component costs. Unfortunately, we are not living in a time where that certitude exists.
After imposing initial tariffs of 34 percent on China on Liberation Day and then quickly escalating them to 145 percent, Trump commented this past Wednesday that they could “come down substantially but won’t be zero.” With the president’s impulsive track record when making macro decisions that impact their businesses, golf industry execs have little to no clarity on planning and are looking to minimize their short-term spending on inventory, capital expenditures, and demand-creation activities like advertising and promotion.
Will there be a recession?
Economists have wide-ranging views on the direction of the U.S. economy for the rest of the year. The consensus suggests the U.S. is in for a slowdown, with some predicting at least a mild recession.
U.S. consumers, who have continued to spend and keep the economy growing over the past few years, are becoming increasingly hesitant to do so, at least based on perceptions from sentiment surveys.
With the weight of possible rapid shifts in economic direction based solely upon the impulses of the president, it’s impossible to forecast where the year will finish. Until a cohesive tariff strategy and plan is in place and communicated, the businesses of every company will need to remain exceedingly fluid.
What’s in store for golf in 2025 and beyond?
The OEM cost of goods on golf equipment and apparel increased markedly with the implementation of the Trump tariffs. And while factories in China, Vietnam, Mexico and elsewhere may absorb some of the extra cost, the bulk of the expense will fall on the OEMs themselves, who will then have to decide to increase their prices, take a margin hit, or do some combination of the two.
In hard goods, many manufacturers are unsure if the current situation will stick long term and are considering imposing temporary tariff “surcharges” on products as long as the tariffs are in place. But, whether it is a higher base price or a surcharge, ultimately, the consumer will see a price increase on many hard goods at retail, dampening demand and likely leading to lower total industry sales.
Some U.S.-made products will see a short-term advantage as they will not have the same tariff-induced cost pressures; however, they will still have some normal inflationary input expenses that may need to be addressed.
On the soft goods side, there is less of an appetite for surcharges and more interest in increasing the base price per unit. On top of increased selling prices over the past few years, these could severely dampen demand.
Looking at consumer demand for golf products, U.S. golfers have reached a potential breaking point on higher prices. After seeing the cost of all golf-related merchandise rise significantly over the past five years, getting them to accept an additional price increase due to tariffs will be challenging.
A former Golf Datatech principal, John Krzynowek has spent the past 25 years helping golf brands navigate the ups and downs of the marketplace for equipment and apparel. Prior to that he held senior management roles in golf equipment sales, marketing, and product design.